Peculiarities of judicial protection and evidence in cases of protection of goodwill

Yuryst&Zakon, No. 28, 8th August, 2019.

Natalia Lavrenova, associate partner, attorney-at-law, mediator at Legal Alliance Company;

Natalia Abramovych, associate, mediator at Legal Alliance Company.

Reputation builds up in a lifetime and breaks down in seconds. (c)

This quote fully characterizes the importance of protecting business reputation in cases of dissemination of inaccurate or negative information that carries reputational risks and losses for individuals and legal entities. That is why it is necessary to be alert and prompt, correct and effective to respond to information that threatens business reputation.

As Ukrainian law does not contain a definition of "goodwill", there has been some discussion about the circle of persons to whom this term can be applied. For example, there was an approach that only a legal entity or a sole proprietor may have a business reputation, that is, the existence of a business reputation was associated with the conduct of an economic activity. Over time, this position has changed, and it is now recognized that everyone has a business reputation, like a name. This is confirmed by the Resolution of the Plenum of the Supreme Court of Ukraine “On Judicial Practice in Cases of Protection of the Dignity and Honor of an Individual, as well as the Business Reputation of an Individual and a Legal Entity” No. 1 of February 27th, 2009, which states that the business reputation of an individual is acquired public assessment of its business and professional qualities in the performance of its work, official, public or other duties, and for a legal entity (including sole traders, advocates and notaries) - assessment of their entrepreneurial, public, professional or other activity performed by such a person as a participant in public relations.

Therefore, any natural or legal person who finds information that is damaging to his or her business reputation may use one of the following means of protection:

• to require the removal of information;
• to exercise the right of answer;
• to require the refutation of false information;
• to appeal to the court to refute false information and to recover damages and / or moral damage caused by the dissemination of such information.

If the first three ways are out of court and are solely the result of an agreement between the infringed person and the infringer or owner of the resource where the information is posted, then going to court requires greater formalities that require professional legal assistance.

That is why we consider it essential to outline the key aspects of court protection of business reputation that are decisive when considering such a category of cases.

Record of untrue or negative information

The first step in detecting false information is to capture the content of such information and the fact that it is disseminated, that is, to inform at least one person in any way. If there is no problem with proving the dissemination of information through printed editions, TV and radio broadcasts (proofs are recorded broadcasts, the printed edition, etc.), then dissemination on the Internet creates certain difficulties for the claimant.

The court practice does not have a single approach to the admission of evidence that has been disseminated on the Internet. In general, the following ways can be distinguished, each with advantages and disadvantages:

Printout of a web page, screenshot, or the web page itself as electronic proof. In essence, the webpage containing the information is electronic proof and can be submitted to the court either in the original or as an electronic copy certified by an electronic digital signature.

Printouts of websites and screenshots can be subject to paper-based electronic proof rules. However, this method of record is quite controversial in the court, as there is a risk that the court will not accept such evidence as proper and acceptable.

Expert opinion in the field of telecommunication systems. Procedural codes now allow the parties to the case to order their own examination. Thus, the most appropriate and effective way of capturing information on the Internet is the examination ordered by a party, during which the necessary content of the web pages will be studied and screenshots of them will be captured. In this case, the screenshots will be a part of the examination, which eliminates the possibility of their rejection by the court separately from the expert's opinion.

Review of the evidence by the court at its location. The procedural codes provide for the possibility of direct examination by the court of the evidence at its location. That is, the court, having the technical ability to access the Internet, can review the relevant information posted on the website. Based on the results of such research, the court draws up a protocol. Again, such a means of proof has a significant drawback: the other party must be informed of the review of the evidence, resulting in the disputed information being removed in advance (provided there is insufficient justification for the review of the evidence without notice).

It is also worth noting the need for linguistic examination (autoscientific or semantic-textual). Such examination can be ancillary evidence in detecting the defendant (auto-examination) and in proving the nature of the disseminated information, for example, to confirm the meaning of offensive words, etc. (semantic-textual examination).

Detection of defendants

The next step after recording the disseminated information is to identify the person to whom the claim will be addressed. Again, all the difficulties of such a process arise in the case of dissemination of information on the Internet, since the announcement of a specific message by a person on TV, radio or by placing information in print media allows you to identify the defendant without attracting additional resources.

It is well known that the defendants in goodwill protection cases, where the information was disseminated on the Internet, are the author of such message and the owner of the web site where the relevant information is posted.

Here comes the first obstacle, which, unfortunately, cannot always be overcome - most resources do not contain information about the owner, and even receiving such information can significantly complicate, or even make proper protection impossible. The following means are used to identify the website owner:

WHOIS service. With this service it is possible to obtain information about the domain name owner and / or hosting provider. However, website owners can easily hide real information about themselves, for example, by creating a legal entity under the law of a foreign country, which is often accompanied by the placement of such legal entities in offshore areas, or by using specialized anonymizer services. It should be noted that in the case of a foreign entity being involved in the case, the notification of such an entity on the consideration of the case and the service of court documents may be a separate topic for the article, but as a rule, such notification must be made in accordance with the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial matters, which is usually much more difficult and protracted.

Contacting the domain name registrar with an attorney's request to obtain information about the owner (registrar) of the domain name. In the vast majority of cases, domain name registrars do not provide information on attorneys' requests, since such information is classified. However, the written refusal of the registrar of the domain name is the basis for appealing to the court for securing the evidence by requiring it before the claim is filed. Upon satisfaction of such an application, the domain name registrar will be required to provide information about the domain name owner.

The most challenging aspect of business reputation protection cases is the identification of the author of the information posted on the Internet. Usually, online resources do not require a real name and the author of a particular material and do not verify any of that information, and use of nicknames and pseudonims is the most popular way of hiding a real person.

Even with the real name of the author, it is difficult to identify the person and establish their place of residence. As a consequence, the way to establish the defendant is to submit a request (attorney's request) to the owner of the domain name, or the person listed on the web-site as the owner. If the identity of the author cannot be established, then the website owner is the proper and sole responder, since it is the website owner who has created the technological capability and conditions for the dissemination of the information.

It should be emphasized that there is currently no unified practice in Ukraine for identifying the person who disseminated information on social networks (Facebook, Instagram) through their personal profile in such networks. In particular, in the decision of the Court of Appeal of the Kherson region in case No.667/266/15-c dated 06.03.2018, the court did not accept as a proof of the defendant's identity a link to his profile on the social network "VKontakte", since in social networks any person can sign up under any name, and it is impossible to verify such information. At the same time, in many other cases, the courts have accepted such arguments.

Determination of the amount of losses

As noted above, in addition to the right to reply and the rebuttal of false information, remedies for protecting goodwill may also include claims for damages and compensation of non-pecuniary damage caused by such violations to both individuals and entities. Payment of damages in goodwill disputes is not widespread, as it is very difficult to prove it.

The following dispute categories may be subject to damages in the form of:

• expenses that the person has incurred or should incur to restore his or her infringed right;
• the income that a person would actually receive under ordinary circumstances if his or her right were not violated.

The amount of the loss should be documented, for example, by providing financial statements, receipts and documents confirming the costs of the restoration, the expert opinion provided upon the economic examination on the calculation of losses, etc. Consideration should also be given to the a causal link between the fact of dissemination of information and the result uch as harm.

In addition to pecuniary damages, non-pecuniary damage may also be recoverable. With respect to a legal person, such damage means loss of non-pecuniary nature, which has occurred due to the degradation of its business reputation, encroachment on the trade name, trade mark of the goods, disclosure of trade secrets, as well as committing actions aimed at reducing its prestige or undermining its confidence.

Case law also shows that appeals to state and local authorities (including law enforcement) are not a dissemination of untrue information, but merely the exercise of the right of persons to apply to the competent authorities to verify the information contained in such appeals .

It should be noted that even if the defendant has a personal subjective opinion but it is expressed in a brutal, degrading or obscene manner that degrades business reputation, he or she may be liable for non-pecuniary damage.

Currently, Ukrainian law stipulates that the amount of non-pecuniary damages is determined at the discretion of the court, whereby in the same circumstances the same court awards completely different amounts of non-pecuniary damages. Having a substantive evidence base reduces the risk of non-pecuniary damages by far less than claimed. Such evidence may include: written evidence (for example, medical reports that confirm the harm to health by disseminating certain information); psychological examination on determining the amount of non-pecuniary damages; testimony of witnesses, etc.

It should be emphasized that when claiming the amount of damages or non-pecuniary damages it will not be superfluous to provide evidence of the level of goodwill of a natural or legal person. For example, evidence that confirms a person's social status or reputation as a consumer.

However, the history of this rather complicated category of disputes shows that sometimes all efforts and the perfect evidence base are powerless, when even indecent images in courtrooms turned into titles of classical works and names of writers.